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TSMC gets pulled into Taiwan election fray at VP debate

TSMC is building factories in Japan and the US state of Arizona

TAIPEI (Reuters) - Taiwanese chipmaker TSMC was dragged into the election campaigning fray on Monday as vice presidential candidates argued over the company's overseas investments and whether tensions with China made Taiwan too dangerous a place to invest.

The Jan 13 presidential and parliamentary election is happening as China, which claims Taiwan as its own territory, has stepped up military pressure to assert those claims, including staging war games near the island.

Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and island's most important company, is occasionally mentioned on the campaign trail, though issues that affect the sector such as the stability of the power grid and water shortages are much more frequently discussed.

Speaking at a live televised debate, Jaw Shaw-kong, the vice presidential candidate for Taiwan's largest opposition party the Kuomintang (KMT), said that Wall Street financiers had met him before he knew he was entering the presidential race and asked if there was going to be war.

"If Taiwan does not have a peaceful environment, nobody will dare invest," Jaw said, blaming the ruling Democratic Progressive Party (DPP) for tensions with China.

"Our TSMC wants to run off overseas. Taiwan plus one - one factory in Taiwan, one overseas, hollowing out our Taiwan."

TSMC, which is building factories in Japan and the US state of Arizona plus planning another in Germany, did not immediately respond to a request for comment. The company and the government have repeatedly said the bulk of manufacturing, including of the most advanced chips, will be kept in Taiwan.

The DPP's vice presidential candidate Hsiao Bi-khim, formerly Taiwan's high profile de facto ambassador to the United States, told Jaw that foreign investment has reached record highs under the DPP administration.

"TSMC is the pride of Taiwan and should not be used for political competition or consumption. It is our sacred mountain protecting the country," she said, using a commonly used expression in Taiwan describing how important the company is for the island's economy.

TSMC makes decisions on their global footprint based on industry and customer needs, Hsiao added.

"We hope all Taiwanese businesses will have everyone's blessing in the process of the global layout."

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